Israel turns 60 years old this week. Antitrust has become more important as Israel has moved towards to market system and away from its socialist origins. As Israel celebrates its 60th birthday, one piece of news has gone unreported in nearly all news stories about the birthday-- Israel is in the process of joining the OECD, which also means membership in the OECD Competition Policy Committee, or as Angel Gurría, OECD Secretary-General stated a few months ago, "The benefits of this accession process are manifold. It is a triple-win
partnership: Israel wins, the OECD wins and the world economy will win
too."

ABSTRACT: In this paper we take for granted that there is no real difference in the stated objectives of EU and US competition policy. In fact, as we discuss, the Europeans have made great efforts towards adopting evaluation criteria based on efficiency considerations. However, we look at how the objectives are implemented and argue that there emerges a problem of standard of proof and of how the analysis of the effects of a certain practice on consumers should be conducted. On this, American and European standards are probably still apart. We proceed as follows: first, we briefly review the consumer welfare criterion and we show that its adoption has led to a wider use of the "Rule of Reason" based on economic analysis. We then highlight the issues represented by the standard of proof. Hence we review the application of the standard of proof in Europe and the US: we find a great deal of convergence, but we also find differences especially with regard to the unilateral behavior of a "dominant" company. We then discuss the treatment of unilateral behaviour in the US and in Europe in light of the recent decision of the Supreme Court in the Verizon case. We conclude suggesting that Europe has gone a long way towards a consumer welfare-based standard. However, the process has taken place at different speeds in different areas of the law, so that the European approach to unilateral behaviour may resent from the idea that dominant firms have a "special responsibility" towards their competitors.

ABSTRACT: Cumulative abnormal returns are calculated over an event window of three days to take lead and lag effects into account. The method-ology is applied to a small sample of cases, including both merger and market inquiries, referred to the CC in recent years. In two cases, the investigations were ongoing at the time of writing. Various events were examined including the bid announcement date (for merger inquiries), the date of the reference to the CC, and date of publication of the issues statement, emerging thinking document (for market inquiries), provisional findings and final report. In some cases OFT announcements in the run-up to the reference were also examined.

Event study analysis is a branch of econometrics which attempts to measure the effects of economic events on the value of firms by examining stock market data. Providing that share prices reflect the underlying economic values of assets, changes in equity values will properly capture expected changes in the economic profitability of the firm. This requires us to accept the hypothesis that stock markets are efficient and that prices reflect all publicly available information relevant to the prospects of the firm. Thus the effect of an event will be reflected almost immediately in asset prices. This immediate reaction makes any link easier to establish than if we were examining say, profitability, which might require months or years of observation before the effects of the event were fully felt.

2. This paper considers the effect on stock prices of announcements relevant to Competition Commission (CC) references, using established event study method-ology. The methodology is discussed in the first two sections of the paper. We have chosen to adopt a market model of abnormal returns, calculated using daily total return data from Datastream.

ABSTRACT: This article assesses European competition enforcement from a perspective of political science using an institutionalist approach. It examines the key role of competition agencies, the way in which they cooperate through regulatory networks, and explores the coherence of the European Competition Network. It includes an exploration of the diversity of European competition agencies. It examines the idea of the European "common competition culture" and analyses the proposition that European competition policy is biased towards a neo-liberal, or Anglo-Saxon, model of economic organisation which has been extensively influenced by transatlantic experience and by the adoption of a consumer welfare principle. It concludes by noting the French backlash against a neo-liberal emphasis and raises questions about the accountability of the agencies and the competition policy itself.

The use of economic evidence in litigationRecent case outcomes suggest that economic evidence is having a more prominent role in court decisions. For example, in PeaceHealth, the court adopted a significant portion of the AMC test for bundled discounts. In Whole Foods, despite contradictory intent documents, the judge chose to rely on the parties’ critical loss analysis in assessing competitive effects and market definition. Are there similar examples from the European Commission?

Given the increasing importance of economic evidence to prove and defend against antitrust claims, how is this evidence best presented? When different types of analyses can lead to the same conclusion, how do you determine the most effective one to use? While simple analyses might be easier to understand, they can also be subject to criticism that the results are confounded by variables that were not considered. If you present complicated analyses, courts and juries might find it difficult to interpret the results. So is it better to present an analysis that strikes the appropriate balance, or should you present both the simple and complicated analyses?

Join our distinguished speakers as they discuss recent developments and share their experiences in presenting economic evidence in the United States and Europe.

Reception, dinner, and keynote addressTo cap off the day, Bates White and ESMT Competition Analysis will host a reception and dinner at the Ronald Reagan Building and International Trade Center. It will feature opportunities to network with leading academics and other antitrust attorneys in an informal setting. FTC Chairman William Kovacic will give the keynote address.

ABSTRACT: In its ninth year of operation, the main priorities of the South African Competition Commission reflect a maturing of the competition regime, as well as a growing recognition of the importance of competitive rivalry in the development of the South African economy.

The Commission is much more active in the area of anticompetitive practices and has increased its focus on cartels; it has identified four priority sectors for attention; and it is engaged in substantially strengthening its capacity.

These are some of the key changes that emerged from a strategic planning review initiated in 2006. After providing some background on the evolving competition regime in South Africa, the author addresses each of these recent developments.

ABSTRACT: This paper discusses the multi-jurisdictional enforcement of competition law analyzing one particular dimension: the interaction between European competition law and the competition laws of the new Member States. The paper examines the transfer and implementation of the competition acquis into these countries and the leverage of the EU in the way competition laws developed in the new Member States as well as the impact of enlargement on European competition law. The paper examines whether this extraordinary way of lawmaking could efficiently deal with specific market failures and with the need to develop effective enforcement and institutional structure in transition economies. The analysis reveals relevant institutional deficits in the EU and what its cost-benefit and policy implications are for the interaction between the two jurisdictional levels (EC-CEECs). The im(com)plications of introducing private enforcement of competition law will serve as example. The central query is whether the same rules applied in a multiple variety of institutions can result in uniform and consistent law application as well as in equal gains and losses for the jurisdictions.

ABSTRACT: This paper introduces means of quantifying the global proliferation in antitrust laws, particularly through measures to assess the presence of such laws across a large set of countries. The Antitrust Law Index maps the presence of "laws on the book" into a numerical measure of competition regimes by assigning binomial scores for the presence of particular laws in a jurisdiction, and then summing the individual components to yield a total score. The key result is that strong laws do not necessarily represent effective antitrust policy. There appears to be a nonlinear relationship between adaptation of antitrust laws and the size of national economies. The results suggest that the impetusfor adopting antitrust laws appears to be related to the guidelinesof "model" laws and highlights the gap between de jure legislationand de facto implementation.

ABSTRACT: This article examines Microsoft’s offense in withholding full information to its workgroup server operating systems rivals so that they could not interoperate with Microsoft’s systems as seamlessly as Microsoft could.

This article agrees with John Vickers’ observation that the Court stretched each of the Magill/IMS criteria defining circumstances so exceptional that they warrant a duty to deal, and thus created confusion as to the limits of exceptionality. It argues that the Court should have resorted to concept rather than factors (principles rather than rules) to define exceptionality, and that, doing so, it might have reached the same outcome, but in a more principled way. The article concludes, however, that the duty-to-deal outcome in Microsoft is not the only logical one; indeed, where a court ends is a function of where it begins.

ABSTRACT: This paper develops a model of successive oligopolies with endogenous market entry, allowing for varying degrees of product differentiation and entry costs in both markets. Our analysis shows that the downstream conditions dominate the overall profitability of the two-tier structure while the upstream conditions mainly affect the distribution of profits. We compare the welfare effects of upstream versus downstream deregulation policies and show that the impact of deregulation may be overvalued when ignoring feedback effects from the other market. Furthermore, we analyze how different forms of vertical restraints influence the endogenous market structure and show when they are welfare enhancing.

ABSTRACT: Since the enactment of Law No. 8.884, of June 11, 2004, a new legal antitrust framework came into place in Brazil, setting into motion the government's objectives of enhancing the competitiveness of the Brazilian economy. In this article we try to answer the question: Who fears the Brazilian Antitrust Authority? The possible answer to this question was sought in the decisions handed down by the Brazilian antitrust authority in the course of all the administrative proceedings that took place during the last 10 years (1997-2007). Assessing the available data collected by an extensive jurisprudence research, we decomposed the question above into the following specific questionings: (i) What were the illicit behaviors subject to greater punishment?; (ii) Who was more frequently punished?; (iii) In which economic sectors illicit behaviors were more condemned?; and, finally (iv) Did the Brazilian antitrust authority care about signaling its decisions to the economic agents ? In light of the data collected we could observe that (i) the condemnations of the Brazilian antitrust authority usually punished behaviors in very general grounds, i.e. diminishing or imposing limitations to the free concurrence; (ii) enterprises and entrepreneurs were less subject to condemnations than associations and class unions; (iii) the health sector concentrated a much more extensive number of condemnations than any other economic sector; (iv) the Brazilian antitrust authority showed an increasingly concern about the importance of the obligation to disclosure the content of decision previously handed down.

In the old game show, To Tell the Truth, panelists tried to convince the audience that they were the one associated with a particular story. They had to weave facts and details into the story to make it sound like the events had happened to them. The audience had to try to figure out which facts were likely to be consistent with the actual story. At the end, the host asked the real person associated with the story to stand up.

Analyzing a merger has many similarities to this old game show. While hopefully no one in a merger analysis is actively trying to mislead, the decision makers must still sort through a plethora of facts to determine which are consistent with a theory that would condemn a merger versus a theory that would clear a merger. This is a particularly difficult exercise in a retail merger. There are no customers to interview and there are no customers’ documents from which one can glean how they might behave in the event of changes in the competitive environment. Which facts are meaningful and which are simply details that serve only to obscure the story? Which facts should be given weight and which should be ignored? And, how much weight should documentary and testimonial evidence be given as compared to economic evidence?

An examination of these issues in the Whole Foods matter shows that what the U.S. Federal Trade Commission (FTC) and the district court thought the evidence showed, and what weight to give various evidence, differed so significantly that they reached entirely different conclusions about the matter.

BOOK SUMMARY: This book is a concise, highly practical guide to the leading cases of European competition law. It focuses on Article 81 EC, Article 82 EC, the European Commission's enforcement powers and the private enforcement of competition law in national courts.

The book is designed as a working tool for the study and practice of European competition law. An introduction at the beginning of each chapter lays down the relevant laws, regulations and guidelines for each of the topics and sets the analytical framework for the case summaries that follow. The case summaries are then provided, each followed by analysis and commentary that add further context

Law Seminars International is pleased to present a one-hour expert telephone analysis on the long awaited DC Circuit decision in FTC v. Rambus, Thursday, May 8, at 2:00 PM (Eastern)/11:00 AM (Pacific). To address this important decision and its impacts, we have two key participants in the litigation: Douglas Melamed, partner at WilmerHale and counsel for Rambus, and M. Sean Royall, Gibson, Dunn & Crutcher LLP, former Deputy Director of the FTC Bureau of Competition and lead FTC counsel in the Rambus trial. Moderated by former FTC Policy Director, David Balto, Law Office of David Balto, this is a great opportunity to stay current on major developments in the FTC's efforts in the area of standard setting and IP enforcement. You can call in from anywhere.

ABSTRACT: The current paradigms of antitrust law - price and efficiency - do not work well enough. The price and efficiency paradigms are hard to fully understand and are not particularly transparent in their application. Moreover, in a disturbingly large number of circumstances they are unable to handle the important issue of nonprice competition. In this article we suggest replacing the older paradigms with the somewhat broader approach of consumer choice.

ABSTRACT:
Arguably the largest abuse of dominance case in Europe before Microsoft was the IBM
case of the early 1980s. Both cases were about interoperability and
bundling, and both followed litigation in the United States. Unlike Microsoft, the European IBM case was settled without a decision being taken, so the public record is thin.

This
paper looks back at the case, and the increasingly competitive
environment surrounding IBM, and contrasts it with the situation of
Microsoft. The September 2007 judgment of the Court of First Instance
in Microsoft is then discussed. That the Commission won on
interoperability is welcomed, but not the apparent ease of its victory,
which may have left unclear limiting principles for the future.

Recent developments with regard to vertical merger enforcement in both the United States and Europe suggest a potential divergence between the two jurisdictions, and raise questions regarding the standards of enforcement for mergers involving vertical foreclosure issues.

What is the current thinking for vertical merger enforcement, and how should a counselor counsel her clients and present vertical merger issues to the U.S. agencies and the European Commission? This panel will discuss a number of important issues, including, the Department of Justice’s consent order in Monsanto / Delta and Pine Land Company and the European Commission’s decisions to extend review of the Nokia / Navteq and TomTom /TeleAtlas mergers (while at the same time, the Department of Justice cleared both transactions within the initial 30-day HSR waiting period). In addition, the panelists will discuss the U.S. Department of Justice’s 1984 Non-Horizontal Merger Guidelines, their continued relevance in merger enforcement, and the differences between U.S. policy and EC policy, as reflected in the European Commission’s new Non-Horizontal Merger Guidelines, published last year.

Please join our panel of experts, including representatives from both Europe and the United States, for a lively discussion of vertical merger enforcement on both sides of the Atlantic.

ABSTRACT: Code-share alliances have become a prominent feature in the competitive landscape of the airline industry. However, policy makers are extremely hesitant to approve proposed code-share alliances when the potential partners’ route networks have significant overlap. The main concern is that an alliance may facilitate price collusion on partners’ overlapping routes. This article shows how policy makers can use a structural econometric framework to quantify the competitive effects of proposed code-share alliances, where potential alliance partners compete on overlapping routes in the prealliance industry. As an example, I apply the econometric model to the Delta/Continental/Northwest alliance. This proposed alliance was initially greeted with skepticism by the U.S. Department of Transportation owing to the potential partners’ unprecedented level of route network overlap. For the markets considered in my analyses, it appears as though the ultimate approval of the alliance by policy makers was justified.

ABSTRACT: In this article I derive a concentration measure for markets with multiple vertical segments. I derive the measure using a model of vertical contracting in which upstream and downstream firms bargain bilaterally and may be integrated. The resulting vertical Hirschman-Herfindahl index provides a measure of the degree of distortion in the vertical chain as a result of both the horizontal concentration in a segment and the degree of its vertical integration. This measure distinguishes between the differing competitive impacts of upstream and downstream competition, establishes the relative size of integrated firms in each segment, and provides a quantitative threshold test for vertical mergers.